The current “panoply” of significant catastrophe loss events affecting the insurance and reinsurance market are expected to drive structural change in products, as well as continued upwards momentum in pricing, according to Kroll Bond Rating Agency (KBRA).
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Mergers & acquisitions in the reinsurance market are set to continue, according to a new report from Fitch Ratings on the reinsurance market. But scale, while sure to help some under-pressure reinsurers, may not always be the answer to the real issues causing structural change.
Two more of the big Bermudian reinsurance players have announced a merger. AXIS Capital and PartnerRe have agreed to combine to form an $11 billion reinsurance player, which they hope will strongly position them to respond to structural changes in the market.
The reinsurance market is moving beyond simply being soft into something “more structural”, as low pricing and competition from ILS and alternative capital continue to threaten the traditional reinsurance model, according to Fitch.
The global reinsurance industry is looking at a period of structural change and reduced margins, as the industry comes to terms with the new environment of excess capacity, both traditional and alternative, higher competition and lower rates.
Moses Ojeisekhoba, Chief Executive Officer, Reinsurance at Swiss Re explained this week that the reinsurer expects prices will rise at the end of year renewals, no matter what the structure being transacted is and that while its appetite for catastrophe risks continues to grow, the reinsurer will remain underweight Florida for now.
The reinsurance market has reached a tipping point, as the three C’s of climate, conflict and capital coalesce to reduce available dedicated reinsurance capital, with this decline unlikely to be replenished before year-end by inflows of alternative or ILS capital, broking group Howden has explained.
Property and casualty insurer UPC Insurance, part of United Insurance Holdings Corp., has almost filled the lower-layers of its mid-year reinsurance tower, but the coverage has been restructured to an occurrence tower, instead of the cascading aggregate protection the insurer had in prior years.
Man Group, a global independent alternative and active investment management firm, is building out a range of capital solutions services of relevance to the insurance and reinsurance industry, which includes the ability to help third-party investors access returns derived from insurance risks.
The value of divestments needed to get insurance and reinsurance broker Aon’s acquisition of rival Willis Towers Watson (WTW) over the line continues to increase, with South Africa the latest country who’s competition authority has requested a remedy specific to its marketplace.